Highlights

• MP Materials has achieved full vertical integration in U.S. rare earth production, but trades at 44x forward EV/EBITDA with heavy reliance on DoD contracts and price floors rather than market-driven profitability.
• The company's 'too big to fail' status stems from government equity ownership, DoD offtake agreements, and lack of U.S. alternatives—meaning policy failure may paradoxically strengthen MP's position as competitors disappear.
• While management has executed well on operational milestones, investors should separate strategic necessity from shareholder value, as current pricing already reflects policy support and limits upside through profit-sharing clauses.

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A Dec. 30, 2025 Seeking Alpha article (opens in a new tab) by Andres Veurink argues that MP Materials Corp. (NYSE: MP) has become a fully vertically integrated U.S. rare earth champion—but cautions investors not to confuse strategic importance with attractive valuation. The piece acknowledges real operational progress and unprecedented U.S. government backing, while ultimately rating the stock a Hold due to valuation, debt pressure, and heavy reliance on Department of Defense (DoD) contracts.

What the News Gets Right

The analysis is broadly sound. MP Materials has fundamentally transformed since outsourcing most processing to China just a few years ago. The company now operates mining at Mountain Pass, California, midstream processing, and is ramping downstream magnet production in Texas.

The author correctly highlights MP’s premium NdPr pricing under DoD contracts (with a $110/kg floor), multi-year offtake agreements with DoD, Apple, and GM, and the strategic significance of a ~15% U.S. government equity stake.

The article is also right to flag that MP’s apparent revenue strength is policy-supported, not purely market-driven. Price floors, stockpile payments, and guaranteed EBITDA at the future 10X magnet facility materially reduce downside risk—but also cap upside through profit-sharing clauses. That nuance is often missed in promotional commentary.

Where Investors Should Be Careful

The valuation concern is legitimate. At roughly 44x forward EV/EBITDA, MP trades far above sector medians despite an unprofitable bottom line, rising debt (~$1.0B), and material interest expense. This is not a conventional mining equity—it is closer to a defense-adjacent industrial policy asset.

The article also raises an important unanswered question: how dependent is MP on the DoD to remain profitable? While management expects profitability to return, a significant share of near-term economics appears tied to government guarantees rather than open-market demand. Investors should certainly watch Q4 2025 and 2026 disclosures closely to understand how much EBITDA is policy-derived versus operationally earned.

Stock Perspective: Fundamentals and Technicals

Fundamentally, MP is strong on strategy, weaker on valuation discipline. The balance sheet can support expansion, but execution delays or NdPr price volatility could quickly compress multiples.  And execution delays come with the territory.

Technically, the stock has already priced in much of the good news following its 2025 rally and subsequent correction, suggesting limited near-term upside without a clear profitability inflection.

The Bigger Picture

And yes, from a national perspective, MP remains a cornerstone of the effort to rebuild the U.S. rare earth supply chain. From an investor perspective, however, strategic necessity does not guarantee shareholder returns at today’s price.

REEx View

The Seeking Alpha piece is balanced, not promotional. Its caution is warranted. MP Materials is a strategically vital company—but at current valuation levels, investors should separate policy support from fundamental value creation. 

Yet MP Materials increasingly fits the definition of “too big to fail,” not because it is flawless, but because it is singular. It is the only U.S. company that controls the full rare earth value chain—from mine to processing and heading toward magnet manufacturing—with active government equity ownership, DoD offtake contracts, price floors, and equity agreements embedded in its business model. That web of policy entanglement creates an asymmetric outcome: if U.S. industrial policy succeeds, MP benefits; if it fails or stalls, MP may benefit even more.

In a scenario where political winds shift, subsidies thin out, and cheaper Chinese rare earths flood global markets, smaller or less integrated ex-China players would likely be squeezed, delayed, or wiped out altogether. MP, by contrast, would almost certainly remain standing—not because markets protect it, but because the U.S. government would be forced to protect itself.

Having already anchored national security supply chains, signed long-term contracts, and tied strategic credibility to MP’s success, Washington would be hard-pressed to let the company stumble, even if others falter. Ironically, the absence of a comprehensive, coordinated industrial policy could consolidate advantage around MP alone—leaving it as the last, indispensable pillar of America’s rare earth ambitions while competitors disappear.

We sincerely hope that this outcome does not materialize. If so, Rare Earth Exchanges would have failed in its mission.  It is also important to note that while the company faces a complex set of execution challenges, management has consistently demonstrated a strong focus on execution, delivering tangible progress across mining, processing, and downstream integration.

Source: Andres Veurink, “MP Materials: Let’s Not Get Ahead Of Ourselves Here Too Much,” Seeking Alpha, Dec. 30, 2025.

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